Policy|Public finance
For example, raising the VAT on food, reducing pension increases or cutting education are not to the liking of the six largest parties.
The big ones the parties unanimously reject the biggest individual cut and tax increase targets raised by the officials of the Ministry of Finance (MoF).
On Monday, the Ministry of Finance announced the income and expenditure surveys, in which officials present dozens of concrete options for balancing the public finances.
Read more: The Ministry of Finance announced its list: These cuts and tax increases could be made by the future government
The work of civil servants receives praise from the six largest parties at the top level. However, the SDP, the Basic Finns, the Kokoomoo, the centre, the Greens and the Left Alliance, however, mostly support the options put forward in the reports, which they themselves have already presented.
Among the savings targets mentioned by the Ministry of Finance, the largest single ones were, for example, increasing the reduced value added tax rates, index cuts to occupational pensions and other social benefits, and, for example, cutting state subsidies for cultural and sports organizations.
There is virtually no support from the parties for these noticeable adjustment measures, just like for example the savings from education brought up by the Ministry of Education.
Value added tax increasing the reduced rates would mean, for example, tightening the taxation of food and medicines. Completely giving up the reduced rates would bring as much as 2.8 billion euros in additional income to the public treasury, but the change could also be made more mildly.
The Sdp, basic Finns, the coalition, the centre, the Greens and the left-wing coalition say they are against tightening the reduced rates of value-added tax.
“We have always been critical of increasing the reduced rates of VAT. We don’t think it’s sustainable, especially when prices have risen,” says the Sdp vice-chairman Matias Mäkynen.
“Now you can’t raise the price of food and medicines”, says the chairman of the Basic Finns Riikka Purra.
Chairman of the parliamentary group of the Coalition Kai Mykkänen again estimates that VAT increases would accelerate the price increase even more.
Neither reducing the index increases of occupational pensions and other social security benefits is not to the parties’ liking.
Reducing the index increases of social security benefits by one percentage point per year for a period of four years would bring annual net savings of 1.5 billion euros to the public finances. More than half of the savings would come from the reduction of increases in occupational pensions.
As expected, Sdp, Vasemistoliitto and the Greens are against the social security cuts, but the Basic Finns and the majority of the coalition are also against the index freeze.
“We are not at all excited about the index freezing of occupational pensions. Pensioners must be able to rely on the fact that pension contributions have not been paid for nothing,” explains the coalition’s Mykkänen.
Instead, for example, the coalition supports cutting increases in housing allowance. The city center is also sympathetic to cutting housing allowance.
The Left Alliance Lee Andersson finds particularly problematic the alternatives put forward by the Ministry of Education to remove unemployment insurance child increases and child allowance increases for single parents and siblings. According to Andersson, these cuts would be “very destructive from the point of view of poverty and inequality”.
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Reducing the index increases of occupational pensions and other social security benefits is not to the parties’ liking.
Ministry of Finance think that even education cuts should not be ruled out due to the weak situation of public finances. Officials mentioned as realistic options, for example, the shortening of some vocational education degrees from three years to two and the introduction of tuition fees at higher education institutions.
There will be no support from the parties for saving on education.
“It just doesn’t work. We must not cut one euro from education in the next season,” says Vihreiden Maria Ohisalo.
Basic Finns consider the shortening of some vocational education degrees to be worth investigating, but according to Riikka Purra, the purpose would not be to aim for savings, but to increase the number of face-to-face teaching from the current one.
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In the opinion of the Ministry of Finance, education cuts should not be ruled out either.
VM’s the cut of 500–700 million euros outlined, for example, in state subsidies for cultural and sports organizations, does not get support from the parties either. Sdp’s Mäkynen and Greens’ Ohisalo describe it as “loud-sounding”.
In this question, the Basic Finns are on different lines than the others. In Purra’s opinion, at least the grants of cultural organizations can be cut.
The report the chairman of the center, the minister of finance, ordered from the officials Annika Saarikko considers the work of officials to show that savings of around 2.5–3 billion can be achieved “without breaking the core of the welfare state”.
Saarikko, too, is still very careful to comment on which of the tax extortion and cutting targets brought up by the officials would go to the city center.
“As one interesting measure, I could mention, even though this is a relatively small amount, the reform of the reception of refugees and asylum seekers and the streamlining of the residence permit procedure by around one hundred million euros.”
Ministry of Finance undersecretary Juha Majanen said at a press conference on Monday that he hoped that a thorough public discussion of the options brought up by the officials would take place and that they would not be rejected immediately.
“It may be that this generation has to give up something for a while in order to have a welfare state for our children,” Majanen said.
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